Russia–India: Identifying New Opportunities

In 2017, India made its first investments in the Russian Far East outside the oil and gas sector, and the first phase of a Russian–Indian cooperative venture to establish a diamond and jewellery cluster in Vladivostok is now beginning. A number of Indian companies are at an advanced stage of decision-making about investing in machine building and oil and gas extraction. Even so, business leaders from the two countries recognize that there is huge untapped potential for bilateral investment cooperation in the Russian Far East. India and Russia are ready to work together to increase their trade and economic cooperation in the Russian Far East, taking the necessary steps to achieve this and making available special conditions and incentives. In particular, as of 1 August 2017, Indian citizens can take advantage of a simplified visa regime and enter Vladivostok Free Port on an electronic visa. This will have a direct impact on the development of Russian–Indian cooperation in the Russian Far East and the flow of tourists from India into the region. What projects are Indian companies already implementing in the Russian Far East, and what is the key to their success? What mechanisms and solutions could act as a catalyst for the growth of Indian investment in the Russian Far East and mutual trade? In which sectors does Russian–Indian investment cooperation have the greatest potential? What changes need to be made to the regulation of these sectors to make them attractive for Indian investors?

Panellists:
Sergei Cheryomin —
Minister, Head of Department for Foreign Economic Activity and International Relations, Moscow City Government; Chairman of the Board, Business Council for Cooperation with India
Minesh Dave —
Chief Business Development Officer, Tata Power
Shiv Vikram Khemka —
Vice Chairman, SUN Group
Ludmila Kuznetsova —
General Director, "Agrohab" LLC
Alexander Osipov —
First Deputy Minister for the Development of the Russian Far East
Pankaj Patel —
President, Federation of Indian Chambers of Commerce and Industry
Pankaj Saran —
Ambassador Extraordinary and Plenipotentiary of the Republic of India in the Russian Federation
Sushma Swaraj —
Minister of External Affairs of the Republic of India

Russia–ASEAN

Throughout the 20-plus years of relations between Russia and ASEAN member states, particular attention has focused on trade. This year marks the launch of a range of projects in the Russian Far East that are being implemented with the participation of companies from ASEAN member states – in machine building, agriculture, timber processing, transport, and tourism. However, it is also crucial to concentrate on the considerable investment potential, which remains untapped. To ensure the success of projects undertaken in the Russian Far East with the participation of investors from ASEAN member states, unprecedented conditions have been put in place to ensure the highest level of convenience. The region is in a position to become a springboard for building cooperation between Russia and ASEAN countries. Special significance should be accorded to projects, which will create a multiplier effect, joint production based on the application of cutting-edge, innovative solutions, and breakthrough technologies targeted both at the local market and for export to countries experiencing continued growth in demand for products of this kind. It is vitally important to give due consideration to the opportunities presented by multilateral cooperation, whereby investors from several countries participate in a single project. What are the projects being realized in the Russian Far East by ASEAN member states? How can investors from several ASEAN countries be brought together for a single project? What barriers are currently impeding the flow of investment from ASEAN countries into the Russian Far East, and how can these be overcome? Which sectors feature the most promising projects for working together?

Russia–China

Eighty percent of investment in the Russian Far East from the Asia-Pacific region over the last two years has come from Chinese companies. Altogether, more than 20 investment projects, with a total investment value of over USD 3 billion, are being implemented in the macroregion with the participation of Chinese capital. Chinese companies have also announced plans to implement other major projects in the Russian Far East, including construction of a pulp mill and a new sea port. Intensive construction is under way on cross-border transport projects which will connect the Russian and Chinese economies and produce a large multiplier effect for regions in both countries. Within the last year, a project to develop international transport corridors has progressed to the practical stage. The corridors will link the north-eastern provinces of China with the ports of Primorsky Territory. An agreement has been signed between the relevant agencies in the two countries to create a seamless regime for the transit of Chinese cargo via the corridor. This project is a practical example of the linking of the Eurasian Economic Union with the Belt and Road initiative. In order to increase levels of trade, economic, and investment cooperation, new intergovernmental mechanisms have been developed and a Far East centre for supporting Chinese investors has been created. Which projects have already been realized in the Russian Far East with the participation of Chinese capital and have demonstrated their viability? Which are in the early phase? What are the obstacles to their implementation? What mechanisms could become additional drivers of growth in the flow of investment into the Russian Far East from China? What effects can businesses in both countries expect from the launch of the new cross-border corridors?

Moderator:
Andrei Bystritsky —
Chairman of the Board, Foundation for Development and Support of the Valdai Discussion Club

Russia–Japan

One year on from the launch of joint work on an eight-point plan for economic cooperation proposed by Japanese Prime Minister Shinzō Abe, it is possible to speak of a significant uptick in cooperation between businesses in the two countries. Discussions on joint investment projects in the oil and gas sector, agriculture, healthcare, and infrastructure have entered the practical stage. Many of these projects are connected with the Russian Far East. Negotiations have intensified between Russian and Japanese companies on the construction of a gas pipeline and a maritime energy bridge to supply electricity to Japan. Companies are especially interested in collaboration on renewable energy projects. In accordance with a Russian Government decision, from 1 August 2017, visa entry for Japanese citizens entering Vladivostok Free Port will be simplified (by the introduction of electronic visas). This will not only make it easier to do business, but also facilitate the continuing growth in tourist flows from Japan to the Russian Far East. In order to increase Japanese investment in the Russian Far East, a special company has been created jointly with the Japan Bank for International Cooperation. What projects are already being implemented by Japanese companies in the Russian Far East? What is the key to the success of these projects? What misgivings are preventing Japanese companies from investing in the Russian Far East? How can their confidence be strengthened? Which sectors are the most promising? What improvements are required in each sector from a regulatory point of view?

Russia–Republic of Korea

Investors from the Republic of Korea are increasing their commitments in regions of the Russian Far East, and discovering for themselves the new investment support mechanisms that are available in the macroregion. The majority of Korean projects are concentrated in the seafood and agroindustrial sectors. At the same time, such projects account for less than 1% of foreign investment into the Russian Far East from Asia-Pacific countries in the last two years. Investors have yet to discover the potential for investment cooperation that exists in such sectors as mineral extraction, logistics, tourism, energy, cutting-edge technology, and medicine. The window of opportunity opening up in relations between Russia and the Republic of Korea is making it possible for this potential to be realized more quickly, and for work to begin on major projects which can benefit business in both countries, such as the construction of a container line for the Northern Sea Route. Moreover, the prerequisites for a sizeable increase in trade turnover will be met by a free trade agreement between Russia and South Korea which is currently under discussion. What is obstructing the flow of Korean investment into the Russian Far East? What solutions does business need from the governments of the two countries in order to operate with confidence in the macroregion? How does Korean business rate the competitiveness of conditions for investing and doing business in the Russian Far East? What experience can South Korea draw on in the Russian Far East to improve the investment climate? Are Russian and Korean businesses interested in implementing megaprojects such as the development of the Northern Sea Route and the creation of an Asian energy ring? What are Russian and Korean businesses expecting from a free trade agreement between Russia and Korea?

Moderator:
Mikhail Bondarenko —
Trade Representative of the Russian Federation in the Republic of Korea